Payroll News | Webster University

Payroll News

Voluntary Retirement Incentive Program Tax Information

  • There is no set taxation rate for the VRIP lump sum payout like the bonus calculation which is 25%.
  • We use the tax profile that the employee has in place, the only caveat to this is we use a 9 week tax spread versus biweekly or semi-monthly.
  • This 9 week tax spread gives the employee the biggest tax break we have available because the system is now looking at the payment as if it were paid over 9 weeks versus 2 weeks or semi-monthly.
  • Payroll does have the ability to provide a mock up / estimated net payment (after taxes) amount for Early Retirement payments.
    • Keep in mind that the mock up net amount is only an estimate.
    • The final gross payout (before tax) amount will be provided to payroll by Human Resources once the pool of employees has been finalized.
    • Keep in mind that taxes are very fluid and the current Presidential Administration has made changes to the tax tables with possibly more in the future.
    • Keep in mind that any changes to your tax profile will impact the early retirement net payment.
    • I highly suggest sitting down with a tax advisor and or a financial advisor on how to approach receiving such a large amount of money at one time to ensure you are receiving the maximum benefit.
    • Should you decide to make tax changes, you can make them via the “myadp.com”, ADP Self-Service Portal or by bringing in a paper W-4 form to the payroll office.